Sorry if I posted this in the wrong forum. So, I started a rental property company, with in the last month, and my mother would like to put her townhome (her rental property) in my company's name as the "inaugural rental property". The company has not had enough time to build any capital, as I am out of town for the rest of the year. How do you go about putting a property into an LLC? I'm sure there is more than one way to do this, just looking for my best option in my current situation. You guys are great.
The way I've done it in Ohio is to just have a title company do a quit claim deed. Admittedly I'm a beginner to but that is how I've done it.
One note - if your mom still owes on her rental property, make sure you check with the lender. I've heard some banks will/have the right to call your note. Not sure if this is an empty threat or whether is actually happens but definitely something of which to be aware.
Just to clarify: So then the home will be in the LLC's name? And the mother's rental payments will go to the LLC, which will in turn pay off the mortgage? What is the advantage of this?
@Ian Kurela , if you attempt to quit claim a mortgaged property to an LLC, the mortgage company may "call" your mortgage, or in other words, make the entire balance due and payable immediately. In that case you may have to find financing to refinance the property just to keep it! The best option is to refinance in the name of the LLC, but to do that your LLC needs a credit rating (impossible without a DUNS), and appropriate closing costs and reserves.
You can't just transfer mortgaged property into an LLC because it then let's the individual off the hook in the event the property needs to be foreclosed. You can set up your LLC as the management of the property and let your mother pay her rent payments to the LLC, and let the LLC pay the mortgage. But there is no real advantage to this.
Check with the lender. If it’s okay, then just transfer it after closing. Some lenders allow this others don’t. Make sure you add your entity name to your insurance policy
@Ray Harrell Awesome. Thank you for the explanation!